Transcript Chapter 4_Consumer Behavior in Service - UL2011-2012

Chapter 4
Consumer Behavior in
Service Encounters
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4- 1
Where Does the Customer Fit in a
Service Organization? (Fig. 2.1)
 Consumers rarely involved in manufacture of goods but
often participate in service creation and delivery
 Challenge for service marketers is to understand how
customers interact with service operations
 Flowcharting clarifies how customer involvement in service
encounters varies with type of process - see Fig. 2-1:
 People processing (e.g., motel stay): customer is physically involved
throughout entire process
 Possession processing (e.g., DVD repair): involvement may be limited to
drop off of physical item/description of problem and subsequent pick up
 Mental stimulus processing (e.g., weather forecast): involvement is
mental, not physical; here customer simply receives output and acts on it
 Information processing (e.g., health insurance): involvement is mental specify information upfront and later receive documentation of coverage
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4- 2
High-Contact and Low-Contact Services
High Contact Services
 Customers visit service facility and remain throughout
service delivery
 Active contact between customers and service personnel
 Includes most people-processing services
Low Contact Services
 Little or no physical contact with service personnel
 Contact usually at arm’s length through electronic or
physical distribution channels
 New technologies (e.g. Web) help reduce contact levels
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4- 3
Levels of Customer Contact with Service
Organizations (Fig. 2.2)
Emphasizes encounters
with service personnel
High
N ursing Home
HairCut
4- Star Hotel
Management Consulting
Good Restaurant
Telephone Banking
Airline Travel (Econ.)
Retail Banking
Car Repair
Motel
Insura nce
Dry Cleaning
Fast Food
Movie Theater
Cable TV
Subway
• Internet Banking
Mail Based Repairs
Emphasizes encounters
with equipment
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Internet-based
Services
Services Marketing 5/E
Low
4- 4
Managing Service Encounters--1
 Service encounter: A period of time during which customers
interact directly with a service
 Moments of truth: Defining points in service delivery where
customers interact with employees or equipment
 Critical incidents: specific encounters that result in
especially satisfying/dissatisfying outcomes for either
customers or service employees
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4- 5
Managing Service Encounters--2
 Service success often rests on performance of junior
contact personnel
 Must train, coach, role model desired behavior
 Thoughtless or badly behaved customers can cause
problems for service personnel (and other customers)
 Must educate customers, clarify what is expected, manage
behavior
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4- 6
The Purchase Process for Services
(Adapted from Fig. 2-3)
Prepurchase Stage
 Awareness of need
 Information search
 Evaluation of alternative service suppliers
Service Encounter Stage
 Request service from chosen supplier
 Service delivery
Postpurchase Stage
 Evaluation of service performance
 Future intentions
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4- 7
Perceived Risks in
Purchasing and Using Services (Table 2.1)

Functional – unsatisfactory performance outcomes

Financial – monetary loss, unexpected extra costs

Temporal – wasted time, delays lead to problems

Physical – personal injury, damage to possessions

Psychological – fears and negative emotions

Social – how others may think and react

Sensory – unwanted impacts to any of five senses
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4- 8
Factors that Influence
Customer Expectations of Services (Fig. 2.4)
Personal Needs
Desired Service
Beliefs about
What Is Possible
Explicit & Implicit
Service Promises
Word-of-Mouth
Past Experience
ZONE
OF
TOLERANCE
Perceived Service
Alterations
Adequate Service
Predicted Service
Situational Factors
Source: Adapted from Zeithaml, Parasuraman & Berry
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4- 9
Components of Customer Expectations
 Desired Service Level: wished-for level of service quality
that customer believes can and should be delivered
 Adequate Service Level: minimum acceptable level of
service
 Predicted Service Level: service level that customer
believes firm will actually deliver
 Zone of Tolerance: range within which customers are
willing to accept variations in service delivery
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 10
Intangible Attributes, Variability, and Quality
Control Problems Make Services Hard to Evaluate
 Search attributes – Tangible characteristics that allow
customers to evaluate a product before purchase
 Experience attributes – Characteristics that can be
experienced when actually using the service
 Credence attributes – Characteristics that are difficult to
evaluate confidently even after consumption
 Goods tend to be higher in search attributes, services tend
to be higher in experience and credence attributes
 Credence attributes force customers to trust that desired
benefits have been delivered
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 11
How Product Attributes Affect
Ease of Evaluation) (Fig. 2.5)
High in search
attributes
Complex surgery
Legal services
Computer repair
Entertainment
Most Services
Haircut
Lawn fertilizer
Restaurant meals
Foods
Motor vehicle
Chair
Easy
to evaluate
Clothing
Most Goods
Difficult
to evaluate
High in experience High in credence
attributes
attributes
Source: Adapted from Zeithaml
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 12
Customer Satisfaction is Central to the
Marketing Concept
 Satisfaction defined as attitude-like judgment following a
service purchase or series of service interactions
 Customers have expectations prior to consumption, observe
service performance, compare it to expectations
 Satisfaction judgments are based on this comparison
 Positive disconfirmation if better than expected
 Confirmation if same as expected
 Negative disconfirmation if worse than expected
 Satisfaction reflects perceived service quality, price/quality
tradeoffs, personal and situational factors
 Research shows links between customer satisfaction and a
firm’s financial performance
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 13
Customer Delight:
Going Beyond Satisfaction
 Research shows that delight is a function of 3 components
 Unexpectedly high levels of performance
 Arousal (e.g., surprise, excitement)
 Positive affect (e.g., pleasure, joy, or happiness)
 Is it possible for customers to be delighted by very
mundane services?
 Progressive Insurance has found ways to positively surprise
customers with customer-friendly innovations and
extraordinary customer service
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 14
A Service Business is a System Comprising
Three Overlapping Subsystems
Service Operations (front stage and backstage)
 Where inputs are processed and service elements created.
 Includes facilities, equipment, and personnel
Service Delivery (front stage)
 Where “final assembly” of service elements takes place
and service is delivered to customers
 Includes customer interactions with operations and other
customers
Service Marketing (front stage)
 Includes service delivery (as above) and all other contacts
between service firm and customers
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 15
Service Marketing System:
(1) High Contact Service--e.g., Hotel (Fig. 2.7)
Service Marketing System
Service Delivery System
Other
Customers
Service Operations System
Interior & Exterior
Facilities
Technical
Core
Equipment
The
Customer
Service People
Backstage
(invisible)
Front Stage
(visible)
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Other
Customers
Services Marketing 5/E
Other Contact Points
Advertising
Sales Calls
Market Research
Surveys
Billing / Statements
Miscellaneous Mail,
Phone Calls, Faxes, etc.
Random Exposure to
Facilities / Vehicles
Chance Encounters
with Service Personnel
Word of Mouth
4 - 16
Service Marketing System:
(2) Low Contact Service--e.g., Credit Card (Fig. 2.8)
Service Marketing System
Service Delivery System
Service Operations System
Other Contact Points
Advertising
Mail
Technical
Core
Self Service
Equipment
The
Customer
Phone, Fax,
Web site etc.
Backstage
(invisible)
Market Research
Surveys
Random Exposures
Facilities, Personnel
Word of Mouth
Front Stage
(visible)
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 17
Service as Theater
“ All the world’s a stage and all
the men and women merely
players. They have their exits
and their entrances and each
man in his time plays many
parts”
William Shakespeare
As You Like It
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 18
The Dramaturgy of Service Delivery
 Service dramas unfold on a “stage”--settings may change as
performance unfolds
 Many service dramas are tightly scripted, others improvised
 Front-stage personnel are like members of a cast
 Like actors, employees have roles, may wear special
costumes, speak required lines, behave in specific ways
 Support comes from a backstage production team
 Customers are the audience—depending on type of
performance, may be passive or active
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 19
Role and Script Theories
 Role:
A set of behavior patterns learned through
experience and communication
 Role congruence: In service encounters, employees and
customers must act out defined roles for good outcomes
 Script: A sequence of behavior to be followed by employees
and customers during service delivery
 Some scripts (e.g. teeth cleaning) are routinized, others flexible
 Technology change may require a revised script
 Managers should reexamine existing scripts to find ways to improve
delivery, increase productivity, enhance experiences
Slide ©2004 by Christopher Lovelock and Jochen Wirtz
Services Marketing 5/E
4 - 20